Kenya began selling a government bond exclusively via mobile phones on Thursday, a world first aimed at expanding the pool of investors in a country that needs money for infrastructure projects and where many people don’t have a bank account.

The three-year bond, called M-Akiba, can be bought by phone users without any need for a bank account. The issue is likely to be monitored by treasuries in other emerging economies, most of which would like to broaden sources of borrowing beyond banks and other financial institutions.

The government made a limited offer of 150 million shillings ($1.5 million) on Thursday to test the system before a bigger offer of 4.85 billion shillings planned for June. A large screen in the main boardroom of the treasury in downtown Nairobi showed about 200 investors had put in about 600,000 shillings within an hour of the start of the sale.

Kenya has borrowed heavily in the past four years to fund an ambitious development programme, including new roads and a new coast-capital railway, and the government wants to raise more cash. But few ordinary Kenyans bought government bonds, scared off by the minimum investment of 50,000 shillings and the need for a commercial bank account.

Investors can buy the bond for as little as 3,000 shillings, earning a tax-free interest of 10 percent. They will be able to trade it on the secondary market.

“The sale of government bonds in very small amounts through the mobile phone with no need of a bank account is a first in the world,” said Mehnaz Safavian, the lead financial sector specialist at the World Bank’s Kenya office.

MILLIONS OF MOBILE USERS

Only 38 percent of adults have a bank account in the country of 44 million people, compared with 77 percent in South Africa, according to FSD Kenya, a U.K.-funded development programme working to expand access to financial services.

But there were 38.5 million mobile phone subscriptions as of last September, Kenya‘s telecoms regulator said, and Finance Minister Henry Rotich said they were all potential investors that could reduce government dependence on outside financing.

The new bond will be offered on the mobile financial service M-Pesa and similar services that allow users who don’t have bank accounts to pay bills and move money via phones. Both bond purchases and coupon payments will be made through phones.

It represents a further expansion by telecoms operators into areas that have traditionally been the province of banks. Safaricom, which started M-Pesa in 2007, now also offers savings, lending and insurance products.

Rotich said the 10 percent interest rate offered by M-Akiba, higher than 7 percent for bank deposits, could drive demand.

Analysts said the new bond would help the government secure cheaper long-term financing.

“It should allow the authorities to tap into informal savings pools,” said Razia Khan, head of research for Africa at Standard Chartered in London.

Patrick Njoroge, the central bank governor, said it could also boost Kenya‘s national savings rate, one of the lowest in the world at 12 percent of GDP.

“This is a product that will dramatically improve the savings culture of our people,” he said.